ALJ/JCM/jva DRAFT Agenda ID #4843

Ratesetting

Decision PROPOSED DECISION OF ALJ MCVICAR (Mailed 8/2/2005)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of California-American Water Company (U210W) for Authority Pursuant to Public Utilities Code Section 454 to Restructure and Consolidate its Rates for its Monterey and Felton Districts.

Application 04-08-012 (Filed August 11, 2004)

Lenard G. Weiss, Christine J. Hammond, and
Lori Anne Dolqueist, Attorneys at Law, and
David P. Stephenson, for California-American Water Company, applicant.

J. Jason Reiger, Attorney at Law, and Diana Brooks, for the Commission's Office of Ratepayer Advocates, protestant.

Miriam L. Stombler, Attorney at Law, for County of Santa Cruz; Edward W. O'Neill, Attorney at Law, and Tod Landis, for Felton FLOW; David C. Laredo, and Frances M. Farina, Attorneys at Law, for Monterey Peninsula Water Management District; interested parties.

OPINION REJECTING DISTRICT CONSOLIDATION

TABLE OF CONTENTS

Title Page

Summary 22

Background 22

CalAm's Request 33

ORA's Position 44

FLOW's Position 55

Santa Cruz's Position 66

MPWMD's Position 66

The Proceeding 77

Discussion 88

Rate Consolidation Guidelines 88

Rate and Revenue Requirement Impacts 1313

Operational Efficiencies 1818

Service Impacts 2020

Regulatory Impacts 2222

Public Ownership 2525

Customer Preferences 2727

Alternatives 2929

Conclusion 3131

Comments on Draft Decision 3333

Assignment of Proceeding 3434

Findings of Fact 3434

Conclusions of Law 3636

ORDER 3737

OPINION REJECTING DISTRICT CONSOLIDATION

Summary

This decision denies California American Water Company's (CalAm) request to consolidate its rates for Monterey and Felton Districts. Instead, CalAm is directed to implement two-thirds of the Felton general rate increase found reasonable but deferred in Decision (D.) 04-05-023, and to continue accumulating the revenue shortfall in its balancing account. Implementing the remainder of the general rate increase and amortizing the accumulated shortfall in the balancing account will be considered in CalAm's pending general rate case. This proceeding is closed.